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Seattle residential real estate industry is talking about race and wrestling with some history

Author: Katherine Khashimova Long, Seattle Times business reporter

Posted on September 13, 2020

The companywide email from CEO Mike Grady struck a sour chord with many at Coldwell Banker Bain, the Bellevue-based residential real estate brokerage.

Bain executives “fully support peaceful demonstrations (and) … equal justice for all people so that everyone is treated equally,” he wrote June 1, as protests against the Minneapolis police killing of George Floyd gathered intensity in Seattle and the region. “We are sad that anarchists negatively impacted these peaceful protests who(se) purpose is righteous.”

The email drew an outraged response signed by dozens of brokers, who felt the message from Bain’s management, which is all white, ignored the well-documented inequities Black Americans face in the justice system.

“As leaders, you have a responsibility to Black employees and brokers to openly and loudly affirm that they are safe at work from racism and discrimination,” read a letter begun by brokers at Bain’s South Lake Union office. “It is time to take real action. Platitudes are meaningless.”

The letter is part of the recent upheaval in the local real estate industry, which has long avoided grappling with racism and its historical role in keeping Seattle segregated by neighborhood.

In Tacoma, agents are questioning a real estate lobbying group’s support for a white state Senate incumbent over challenger T’wina Nobles, who is Black. A call to action on real estate and race, penned by the only Black owner of a Windermere office, has been taken up by the statewide Realtors association. And brokerages across the region have signaled their intent to increase diversity among their staff.

So far, the promises to change have resulted in a slew of working groups, diversity committees and cultural sensitivity training, but few concrete changes — leading some to wonder whether inertia will overcome idealism.

Dave Jones, the Black owner of a Tacoma Windermere office, called in early June for the industry to “pull back the racist curtain on real estate.” He applauds companies that are thinking hard about how to address racism in their organizations, he said, even if that means they’re moving slowly.

Much of the current focus is on raising awareness among white brokers of their implicit biases, with the goal of creating a more welcoming office for clients and agents of color.

That’s a good first step, Jones said — but alone, it doesn’t go far enough to address inequities like a widening racial homeownership gap that has concentrated wealth in the hands of white residents and brokers at the expense of their Black counterparts.
The white-dominated real estate industry’s participation in discriminatory practices like redlining, racist covenants and steering, according to academic and journalistic research, has had a hand in creating and perpetuating that gap.

“We’re not fighting white privilege,” Jones said. “We’re fighting white supremacy.”

Lack of diversity

In the data-obsessed world of residential real estate, brokerages and industry groups publish breakdowns of real estate agents’ ages, gender, level of education and how often they use social media to promote homes.

One data point that’s rarely collected: race.

“I couldn’t tell you today how many people of color are in our company,” said Windermere President OB Jacobi, noting he had previously believed collecting that kind of data could have been a violation of the 1968 Fair Housing Act.

The industry acknowledges, however, that very few brokers are people of color and even fewer are Black. The National Association of Realtors estimates roughly 5% of its members are Black. Black people make up approximately 13% of the country’s population.

The lack of diversity, Black agents say, has made it easy for white brokerage executives to ignore racism in the industry. Jones’ letter advocated that brokerages recruit more diverse agents and hold themselves accountable by collecting more data on the number of homes they sell to people of color.

“I had a perception before I became a broker that there was racism and discrimination in the industry. I knew it was a predominantly white space,” Jones said. “But I saw there was lots of wealth being built, and I thought that more people need to know how to build equity.”

Jones, a former high school principal, said he likely never would have been an owner of a brokerage were it not for his wife, who is white and has more experience in real estate. They own Windermere Abode together.

The nature of real estate, a relationship-based business in which relatively minor market fluctuations can spell either feast or famine for brokers, means Black people interested in entering the industry face obstacles their white counterparts do not, said Nicole Bascomb, a Black second-generation real estate agent and owner of Bascomb Real Estate Group in Seattle.

For one, residential brokers often rely on their personal networks to find clients. That could be one reason that, according to the National Association of Realtors, Black agents typically earn roughly half as much as other brokers. Just 28% of Black families in King County own their homes, compared to 63% of white residents, shrinking the pool of potential clients for those with predominantly Black networks.

The University of Washington’s Seattle Civil Rights and Labor History Project has highlighted how real estate agents and mortgage lenders wielded racially discriminatory practices to keep Black homebuyers out of white neighborhoods — and in doing so, leached wealth from Black homeowners.

What is a Racial Covenent?

Starting in the 1920s, some white Seattle neighborhoods began including racial covenants in their deeds that restricted homeownership to white buyers only. The language, typically written by developers, was enforced by social pressure from homeowners and residential brokers.

The practice took off in the 1930s, incentivized in part by a federal Great Depression-era program to stabilize the cratering housing market. To prompt lenders to start making loans again, the federal government worked with lenders and real estate agents to delineate the neighborhoods safest for lending.

What is Redlining?

Among the criteria was race: White-only neighborhoods were labeled “best” and received the most favorable mortgage treatment. More diverse neighborhoods were deemed “hazardous” or “definitely declining,” limiting homeowners’ ability to draw on their equity and trapping them in place.

That practice, called redlining, was officially abolished by 1968’s Fair Housing Act. But its effects linger today.

Digital brokerage Redfin found that homes in Seattle neighborhoods with the highest historic concentration of Black homeowners are worth half as much as homes in neighborhoods like Broadmoor, Sand Point and Windermere that had racially exclusionary covenants.

Jacobi said he wasn’t aware of the existence of racist covenants until several weeks ago, despite the fact that his brokerage was founded in a formerly whites-only neighborhood.

“I’m learning every single day about things I probably should have known long ago,” he said. He’d like his company to be able to work with home buyers to get rid of that racist language, he said.

Bascomb said she wasn’t surprised Jacobi hadn’t known about racist covenants. “We live in two Americas,” said Bascomb. “There’s a history that Black folks have to know, and a history that white people don’t have to know.”

Limits on homeownership have exacerbated disparities in overall wealth between white and Black Seattleites, making it harder for Black residents to stay in the city — even in formerly redlined neighborhoods like the Central District, which until the 1980s had one of the highest rates of Black homeownership in the country, according to research from UW professor emeritus Quintard Taylor.

In today’s Seattle, Black residents of formerly redlined neighborhoods are half as likely to own homes as white residents of those same neighborhoods, the same Redfin research showed.

What does Gentrification Mean?

A Black agent at a large local residential brokerage who asked not to be named while discussing colleagues said the lack of understanding about the intersection of housing and race was evident in the way some white agents use the word “gentrification.”
“When I use it, it means ‘Black and brown people sold their homes, likely for less than they were worth, to white developers and homeowners … and got screwed out of a big rise in property values,'” the broker said. “It’s a word of exploitation. But some white brokers say ‘rapidly-gentrifying neighborhood’ like it’s a good thing.”

Changing attitudes

It was a political mailer with racist overtones that sparked Jasmyn Jefferson, a Windermere managing broker in Tacoma and the only Black member on the Washington Association of Realtors’ 24-person legislative steering committee, to push for change.

Early in the 2020 campaign cycle, the Realtors endorsed Republican incumbent Steve O’Ban for state Senate in a district that includes Fircrest and part of Tacoma, and donated $25,000 to an independent political action committee backing him.

The Realtors didn’t interview O’Ban’s Democratic opponent, T’wina Nobles, who is Black. That’s not unusual, Jefferson and Realtors government affairs director Nathan Gorton both said — O’Ban had been a stalwart supporter of the group’s interests.

But Jefferson wondered if the group were missing an opportunity. Nobles knows real estate: Her husband is a broker. And Nobles, who has experienced homelessness, “understands the disparities in homeownership, and what the Black community needs in terms of wealth-building,” Jefferson said. As president of the Tacoma Urban League, Nobles has hosted homebuying education classes for Black residents taught by Realtors.

Jefferson said she wasn’t upset that the Realtors endorsed O’Ban. But she thinks that “had T’wina been able to have that interview, whether or not we would have endorsed her, people would have heard there’s a different approach to being pro-Realtor,” Jefferson said.

At the time, Jefferson didn’t elevate her concerns. Instead, she co-hosted a virtual party for Nobles that raised just shy of $5,000 for the candidate from other brokers.

Then, in mid-July, residents of the 28th District received a pro-O’Ban mailer, produced by the PAC to which the Realtors had contributed, with a black-and-white photo of Nobles so dark her face was almost entirely obscured. O’Ban was pictured in color.
The tactic smacked of racist fearmongering to many who received the mailer. “It looked like they selected a menacing photo of Ms. Nobles, and that to me was problematic,” Jefferson said. She contacted an executive at the Realtors, criticizing the group’s role.
In response, the Realtors “unequivocally condemned” the advertisement in an email to members, saying it had no involvement in the mailer’s creation. (The O’Ban campaign also denounced the mailer.) The Realtors committed to changing how it endorses candidates and donates to political groups.

While the state won’t certify final primary results until Aug. 21, Nobles and O’Ban currently appear locked in a dead heat. Both candidates will appear on the ballot in November’s general election. If elected, Nobles would be the only Black state senator.

The Realtors’ reaction to the mailer has convinced Jefferson that within the industry, the conversation around race is changing slowly but noticeably.

“Two years ago, if I’d brought this up, I would have heard, ‘You’re blowing this out of proportion,’” she said. “The industry seems to be listening differently this time. People are trying not to do knee-jerk reactions. They’re going to fumble through doing things correctly, but we are trying.”

Steps forward

For many, it seems that the industry is seriously talking about racism for the first time.

After a Newsday investigation last year found that real estate agents in Long Island steered Black shoppers to more diverse neighborhood, avoided doing business in nonwhite communities and offered white clients more options than Black clients, the National Association of Realtors developed training materials on implicit bias and fair housing laws, an effort that’s gathered steam in recent months.

Washington will be a test ground for those efforts, said Washington Association of Realtors CEO Steve Franck.

Locally, the Realtors are discussing how to get more people of color into the real estate industry, first by surveying how many Black brokers are members. Windermere is mulling funding scholarships for Black would-be brokers, Jacobi said, and is considering how to implement Jones’ suggestion that it track homes sold to buyers of color. Bain is “investigating] ways we can attract all people, including the Black community, to become interested in a career in real estate as an agent or employee,” according to a letter executives sent to employees.

But some brokers fear this moment will devolve into a slog of panel discussions, diversity committees and town halls of the kind that have abounded in the past months.

At Bain, management referred the brokers’ letter to its human resources department, then announced it would survey agents to “ensure we’re being inclusive and supportive … the first step in helping us launch a Diversity and Inclusion Initiative.”
Surveying Bain’s agents about their experiences with discrimination is pointless, said South Lake Union broker Chavi Hohm, because nearly 98% of them, including her, are white.

Grady said in an email that the survey, which the company undertakes regularly, was intended to show “how those associated with CBBain feel about the company … Our company has a remarkable reputation in our profession, yet we know we can always improve and/or enhance the experiences of our people, and our culture.”

There’s another problem in the industry: Most agents are independent contractors, which means brokerage executives can’t force them into trainings — including training on implicit bias or anti-discrimination, Grady said. He’s requiring all 167 of Bain’s direct hires to take implicit bias training along with management this year, he said, but can’t make the same requirement for brokers. Washington Realtors is working with the state to make such training part of the annual licensing requirements, Franck said.
Franck said his organization, which advises the state Department of Licensing on accreditation standards for brokers, authorized $100,000 to strengthen awareness of fair housing principles in the wake of the Newsday story. So far, that money hasn’t been spent.

Other efforts to retrain brokers have also been slow to get off the ground.

“We were trying to do something about this systemic racism in housing, that frankly the Realtor organization was part of,” he said. “Then COVID hit.”

Jefferson said she appreciates brokerages and trade groups are trying to correct their blind spots.

“I’m OK with them taking their time, being authentic, as opposed to giving us lip service,” she said. “Fixing something so historically entrenched in our industry” won’t happen quickly she said, “even if they should have done some of this stuff earlier.”

Katherine Khashimova Long: 206-464-3229 or kalong@seattletimes.com; on Twitter: @_katya_long.


SEE ALSO:
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